Taxi Scheme Might Be Smaller Than Commission First Thought

The grand New York City taxi fraud may not be as grand as officials first thought.

After announcing that tens of thousands of cabbies had cheated passengers by improperly flipping on an out-of-town meter rate, the chairman of the Taxi and Limousine Commission said on Monday that “a fairly significant number” of the incidents resulted in no additional charges, suggesting they might have been simple mistakes.

Many cabbies apparently changed to the higher out-of-city rate only at the end of the ride, possibly when trying to shut off the meter, according to a two-month sample of GPS data reviewed by the city. Because the cab had already come to a stop, no additional charges were incurred after the meter was switched.

The findings, disclosed in testimony by Matthew W. Daus, the commission chairman, at a City Council hearing Monday, appeared to buttress the argument of many taxi drivers who scoffed at the existence of such a widespread scheme.

“We have been vindicated,” said Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, a drivers’ group. Ms. Desai has said the taxi commission acted irresponsibly in implicating such a wide swath of the city’s cabbies.

In an interview, Mr. Daus said the initial numbers released by his office reflected a “worst-case scenario,” but he felt compelled to alert the public. “We never said all the drivers are guilty; we never said that,” he said.

Mr. Daus said the new findings, which he said were based on freshly available data, offered a “ray of hope” that the problem was more contained. But he warned that significant fraud may still have occurred, adding that drivers found to have intentionally defrauded customers would still face penalties.

The disclosure of such a widespread scheme in one of the city’s core forms of public transportation rocked the livery industry and raised questions among riders. But some cabbies said they felt unfairly demonized when the taxi commission announced that more than 30,000 drivers — about three-quarters of the city’s fleet — improperly used the out-of-city rate at least once. About 3,000 were serial offenders.

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“We have been vindicated,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, saying the city acted irresponsibly. Credit
Yana Paskova for The New York Times

“The T.L.C. acted as judge, jury and executioner,” Ms. Desai said on Monday. “It is ironic that we should have to forgive them for making a mistake, when they refused to give us the benefit of the doubt.”

The overcharging scheme unraveled after a driver from Brooklyn, Wasim Khalid Cheema, was found to have defrauded hundreds of passengers in a period of just a few months. Taxi officials reviewed GPS records from the entire yellow cab fleet and found that passengers had been overcharged $8.3 million over more than two years.

Mr. Daus would not provide specific figures on rides examined in the two-month sample, saying he would defer to the city’s Department of Investigations, which is examining millions of GPS records of taxi trips back to 2007 and is expected to provide a fuller report.

Cabbies, concerned that their reputation with the public had been seriously damaged, protested that the buttons on city-issued meters can be confusing and noted that the out-of-city rate could be inadvertently activated.

Taxi officials admitted as much at Mr. Cheema’s administrative hearing in January, acknowledging that rookie drivers could make such a mistake during “their first week or their first days” on the job.

“These are small buttons, probably a quarter of the size of a telephone button,” said David Pollack, the editor of Taxi Insider, an industry publication. “The overwhelming majority of these so-called rip-offs will be found to be nil.”

City Councilman James Vacca of the Bronx, the chairman of the Council’s transportation committee, said that Mr. Daus had “left open the possibility that this may not be as widespread as many of us originally thought.”

But Mr. Vacca, who led the hearing where Mr. Daus testified Monday, said the public needed a more thorough accounting of the matter.

“What was the degree of human error? And how much of this could be thievery?” Mr. Vacca said. “These questions are demanding more specific answers.”

A version of this article appears in print on March 23, 2010, on page A22 of the New York edition with the headline: Taxi Scheme Might Be Smaller Than Commission First Thought. Order Reprints|Today's Paper|Subscribe